Josh Hardie, deputy director general of the CBI, said: "Businesses up and down the country can do more to step up their engagement with employees and customers, to explain how they are making a positive difference in their communities and workplaces.

"Business must redouble their efforts to show that the horror stories of tax avoidance, poor employment practices and excessive pay are the exception, not the rule.

"Treating employees well is the best place to start. Our findings show that companies which look after their employees will be rewarded by the public, who say this is the best way to improve their views about business.

"Clear communication about the value businesses create locally is also essential - all must junk the jargon. Companies should focus on the issues which matter most to people, starting with business value being an integrated part of local industrial strategies."

Fenella Grey, of PR agency Porter Novelli, which helped with the research, said: "The fact that the reputation of business has improved over the past months despite a backdrop of uncertainty caused by Brexit and slowing economic growth is really positive news for the UK.

"It shows the 'UK plc' is alive and kicking, and remains an important place to do business."

A separate report by the Federation of Small Businesses (FSB) said smaller firms were starting the new year with increased pessimism because of "surging" operating costs, weak domestic growth and flagging consumer demand.

A survey of over 1,000 FSB members found that one in seven were planning to downsize, close or sell their business in the next three months.

Three out of four firms reported a rise in operating costs compared with a year ago.

FSB chairman Mike Cherry said: "As we progress to stage two of Brexit talks, negotiations with the EU27 are set to continue dominating the political agenda.

"While the swift agreement of a transitional arrangement and an ambitious free trade agreement with the EU are absolutely critical, it's spiralling costs, weak growth and flagging consumer demand at home that are front of mind for small firms day to day.

"Our late payment crisis means £18 billion is being withheld from small businesses across the UK, stifling investment for growth and causing thousands of firms to go bust every year."

A Government spokesman said: "This Government's Industrial Strategy is building a Britain in which small business can continue to thrive.

"We've already appointed a Small Business Commissioner whose service is up and running to help tackle late payments, as well as cutting business rates by £2.3 billion, freezing the VAT threshold and reversing the impact of the 'staircase tax'."